Size Matters, Another Lens to See Brick-and-Mortar Store’s Opportunities.

Photo by Tim Mossholder on Unsplash

Small Business: Small, But Not Too Small

According to the 2021 profile from U.S. Small Business Administration, the number of small business company have increased by 0.8 million. It has been only a 1.3 % of growth since 2020. Those firms are “independent businesses with fewer than 500 employees.” While they are not fully representative of the U.S. economy, these small businesses account for 48% of American jobs and 43.5% of GDP, substantially impacting how we plan our “business environment.”

For the purpose of space-planning discussion, I put these businesses in two categories based on their locations.

Main Street Businesses

The first type of business is usually located on a town’s principal street and forms a retail corridor in a district. Industries such as food services, retail trade, arts, entertainment, and recreation are considered in this category.

According to the 2021 small business profile, they constitute a third of small business employment (an estimated 20 million employees).

Though many of these firms have fewer employees, they are essential for forming a good rapport with local communities. Moreover, they offer opportunities for local ownership. It is economically sustainable by keeping local dollars in local communities.

Small Office Businesses

The other type of industries are often placed in low-to-midrise office buildings but also can be found on a principal street. Such as healthcare, professionals, or real estate rental and leasing services.

According to the 2021 profile, they constitute less than a third of small business employment (an estimated 17 million employees).

2021 small business profile in the United States shows they neighborhood retail type business constitute a third of small business employment. The commercial office oriented business is about 28%, less than a third.

2021 small business profile in District of Columbia. shows they neighborhood retail type business is more than the national average, constitute 47% of small business employment.

eCommerce Vs. Brick-And-Mortar

“the new crop of main street entrepreneurs are finding success first online then opening their physical storefront” — Jennifer Overstreet, National Retail Federation.

Since the dot com bubble, people tend to think that booming e-commerce threatens brick-and-mortar stores. E-commerce has grown steadily since 2013; except for a brief sales jump during the lockdown, eCommerce sales constitute about 14% of total retail sales.

That data also demonstrated more customers are used to completing their purchases online. And that consumer habit encourages more entrepreneurs to begin their business with an online presence, especially among females.

According to the 2018 National Retail Federation’s survey, among those young businesses (less than three years), 36 % choose only to have an online presence. The online presence helps entrepreneurs quickly kick off their business without putting huge upfront capital and binding with a lease, increasing their chance to survive and grow steadily in the startup period for the first three to five years. As they gain a more extensive customer base, it is easier for them to secure a physical location. One good example is Warby Parker. It was founded primarily as an online retailer, then gradually grown its physical presence.

The sketch in a later paragraph will show how these businesses could thrive in a conventional neighborhood retail setting.

Typical Neighborhood Retail Stores Setting

Those main street businesses are often located at the podium level of a mixed-use complex or as part of a suburban strip mall. Most of them have 60 feet to 80 feet depth of store plate. This depth is suitable for restaurants, convenient stores, or auto body repair services requiring back-of-house storage space.

The image above is typical neighborhood retail. It uses a 20' module as store frontage. This sketch shows a 12,000 square feet retail floor plate facing the street with 12,000 square feet of parking in the rear. And the stores are rented with 1200 square feet in increment.

“Micro Business”

These 60 to 80 feet deep store plates are often too large or costly for some businesses that don’t need more than 1000 square feet to operate. I call this type “micro-business.”

For the sake of discussion, I also categorize them as follows.

• Neighborhood essentials: they are the traditional neighborhood small retailers that have existed for a long time and operated with physical space. They are telecommunication stores, bakeries, ice cream or chocolate shops, etc. Still, you often find them in a centralized shopping mall instead in your neighborhood.
• Online diva: they have a robust online presence (either on their own website or on sharing platforms such as Etsy, Amazon or eBay). They move to a brick-and-mortar space because they want to extend their virtual image to a physical presence.
• Kiosk king: The third type is those who utilize kiosks in shopping malls. These are often franchised. They could be a mini-massage spa (those you often see in airports), macarons & cookies, a juice bar, accessories, souvenirs, phone repair, etc. But most of the time, they only need one to two persons per kiosk.
• Single-digit LLC: The last one is a small office with less than ten employees, mostly less than five. They could be small startups and professional services (such as accountants, attorneys, or financial professionals). Sometimes even the administrative office runs the ghost kitchen.

The services listed above do not require a deep plate. Since the retail stores have existed in the neighborhood, building a new, less depth of retail store seems impractical. Therefore, aggregating more of these businesses on the same floor would be a better alternative. Strategically mixing them will maximize the use of existing vacant stores, enhance our pedestrian experience and fortify the neighborhoods.

The image above shows morphed neighborhood retail. In this sketch, the leasing space is divided into two zones. One is the street-facing shallower plate, and the other is the rear-facing deeper plate. The standard leasing space in this image is 2400–2500 square feet. A planner can divide the room into two zones, the deeper plate for office or administrative use and a street-facing for small retails. The retail space in this example is 400 square feet and can be expanded in 400 square feet increments

I took those photos while traveling and realized they are ideal for explaining my thoughts. Those are shallower store plates at the ancillary space of a transit station. These store depths range from 6 feet to 12 feet. Also, neighborhoods have no loading or traffic conflict because they can pack their merchandise in a cargo van.

A Hypothetic Scenario: Imagine Marcia, an owner of a custom design jewelry studio, who makes all her collections by hand and has an online shop on Etsy. One day she has enough collection and wants to open a physical shop in her neighborhood. All she needs is this 400-square feet street-facing store and shares studio space in the back office of the strip when she does the customization or overhead work.

Added Sustainable Benefit To Our Storefronts

I am always keen on sustainability; thus, it is worth mentioning that there are surveys that found shoppers claiming that they will spend 9% to 12% more for goods and services in a district with a high-quality tree canopy. Another study found shoppers report they would stay longer, which could mean more sales revenue. Generally, shoppers are willing to spend more when shopping in pleasing natural settings.

This sketch shows what the retail corridor would look like on a typical neighborhood street. One side of the retail is constituted by restaurants, convenience stores, or other types of shops that require a deeper plate. A row of parallel-parking spaces forms a visual barrier from higher-speed traffic, so people dining in the sidewalk café would feel safer. The other side of the street is aggregated with “micro-businesses” that only need a shallower plate. A variety of display windows enhances pedestrians’ and bikers’ street experience.

This illustration shows what the retail corridor would look like on the street with 64 feet of roadway and 94 feet of right-of-way. The shallower plate could form a continuous engaging ground floor activities for pedestrians and shoppers.

Above is a successful example of how urban trees are integrated into a retail corridor in a neighborhood. Tree canopies form a sense of refugee and comfortable feeling not only for the pedestrians but also for the cars passing by. This planning strategy also subconsciously helps passing vehicles reduce their speed. (image via google map)

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